As a rental property owner, your cash flow depends on the consistent collection of rent. The best way to collect rent from tenants is by having a process in place, and to make sure that process is clearly stated in the lease. This will help you avoid late payments and excuses.
Rent Payment Methods
The best way for landlords to collect rent is by making sure the tenant has the ability to pay online. This allows tenants to schedule payments in advance or go online at any time to make a payment, day or night. It eliminates the need to write a check, and online portals are very user-friendly. Many property management software systems come with some kind of platform to accept online rent payments.
Set the Expectation
To effectively collect rent, you need to tell your tenants when it’s due and how it is meant to be paid. If you include this information in the lease, you can go over it with the tenants before they even move in which is the perfect time to set the expectation. Make sure they know where and how to pay rent. This makes it easy on them and keeps everything organized. You can’t get upset about late rent payments if you never told your tenants how to pay. Communication is important.
Late Fees and Consequences
It is very important to communicate the consequences of late rental payments. Many landlords say that the rent is due on the first of the month, and then provide a grace period until the third or the fifth before a late fee kicks in. Whether you have a grace period is up to you, but make sure that your lease states what the late fees are and when they go into effect. You need to be consistent with this practice; don’t let tenants pay late without collecting a fee. They need to be aware of the consequences and they need to understand that you’re serious about on-time rent payments.
Rent Payment Tracking
Our property management software allows us to track rental income and disbursements. As an owner, you have access to your owner portal at any time. There you can look at your monthly statements, invoices and view reports with pictures that reflect the condition of your property.
The easiest way to collect rent is by setting the expectation, maintaining consistent process and having an online system. It’s one of the most important things a property manager can do for you. If you have any questions on our process, please contact us at Liberty Management, and we’d be happy to tell you more.